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Property law

Part of the common law series

Acquisition

Gift · Adverse possession · Deed Lost, mislaid, and abandoned property Treasure trove Alienation · Bailment · License

Estates in land

Allodial title · Fee simple · Fee tail Life estate · Defeasible estate Future interest · Concurrent estate Leasehold estate · Condominiums

Conveyancing

Bona fide purchaser Torrens title · Strata title Estoppel by deed · Quitclaim deed Mortgage · Equitable conversion Action to quiet title

Future use control

Restraint on alienation Rule against perpetuities Rule in Shelley's Case Doctrine of worthier title

Nonpossessory interest

Easement · Profit Covenant running with the land Equitable servitude

Related topics

Fixtures · Waste · Partition Riparian water rights Lateral and subjacent support Assignment · Nemo dat

Other common law areas

Contract law · Tort law Wills, trusts and estates Criminal law · Evidence

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Equitable conversion is a doctrine of the law of real property under which a purchaser of real property becomes the equitable owner of title to the property at the time he/she signs a contract binding him/her to purchase the land at a later date. The seller retains legal title of the property prior to the date of conveyance, but this land interest is considered personal property (a right to the payment of money, rather than a right to the property). The risk of loss is then transferred to the buyer – if a house on the property burns down after the contract has been signed, but before the deed is conveyed, the buyer will nevertheless have to pay the agreed-upon purchase price for the land. Such issues can and should be avoided by parties by stipulating in the contract who will bear the loss in such occurrences. The above rule varies by jurisdiction, but is the general rule.

Effect of death of a party

If one of the parties dies after the contract for sale of the property has been executed, the doctrine will govern how that party's interest will pass to his heirs. For example, the seller wills his real property to his son, and his personal property to his daughter. If the seller dies after the contract for conveyance is signed, his interest in the land will be treated as personal property, and will pass to his daughter.

New York State does not recognize equitable conversion. In New York, as long as the buyer is without fault, the risk of loss remains on the seller until the buyer takes title or possession.

Uniform Vendor and Purchaser Risk Act

A growing minority of States have adopted the Uniform Vendor and Purchaser Risk Act (UVPRA) in one form or another.¹ The UVPRA negates the doctrine of Equitable Conversion as it relates to the risk associated with loss. The risk of loss is retained by the seller (Vendor/Grantor) under the UVPRA. Generally, the provisions of the UVPRA can be modified in the Land Sale Contract.

References/Citations

¹Rabin,Edward et al. Fundamentals of Property Law. Foundation Press: New York, 2006. p1128-1129

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